Green revolution -- where are inner urban apartments?
Looking through the paper and surfing the net it is obvious that "green is the new black" of marketing but where are the green inner urban apartments?
With all this green it is surprising that when consumers surf the ‘new apartment’ sections in Melbourne, on both realestate.com.au and domain.com.au, or peruse The Age, Herald Sun or weekly publications not one development is marketed as green. Outer suburban land estates and commercial buildings are actively promoted as 5 or 6 stars and greater; however apartments to date have not taken to this current marketing trend.
Given the higher affluence of the inner urban demographic, environmental efficiency and sustainability are likely to appeal strongly to residents. If marketers are careful to avoid ‘greenwashing’ their campaigns by misleading or spinning green too hard, true green benefits should appeal to investors.
Recent Australian Property Institute (API) research into “Valuing Green” reported that property investment professionals believed investing in green buildings made good business sense and that the investment performance of a green star building will outperform traditional buildings over the medium to longer term.
In a property Council article published in March 2008 Matthew Quinn CEO of Stockland was cited saying: “A lot of what we are talking about is actually just future proofing your asset base. If you are a long term holder of assets then it is about putting in place sustainable outcomes that will make them last longer and that future proofs them against changes that are inevitably coming.”
Despite the incentives to investors, commercial property is tenant driven and it is the commercial tenants who are driving the demand for green commercial properties, having recognised the benefits such as increased staff productivity from superior ventilation and lighting, and of course, benefits to their bottom line from decreased outgoings. Why then, when big businesses are so aware of the benefits of turning green, has this trend not translated to residential apartment developments?
In outer Melbourne, property developers that have taken on the green mandate have seen sales in those housing estates dominate the local markets. Extension Marketing research conducted this time last year in the northern growth corridor of Melbourne showed Aurora, a six star energy efficient housing estate, was outperforming many of its more established competitors having almost 30% market share (in number of dwellings sold) even in spite of its higher price per m2 and infancy at the time.
We believe that market acceptance of environmentally sustainable product will outstrip that of more traditional apartments, especially as market conditions tighten further as widely expected. People will be more discerning about where they put their money. The cultural shift in this direction is undeniable and as such offers exciting opportunities for residential developers to take market-leading positions in this area.
Extension Marketing are currently involved in number of environmentally sustainable developments that are expected to hit the market this year. We will report on their progress in forthcoming newsletters.
Information for preparing this article came from:
www.gbca.org.au
www.greenbiz.com
www.propertyoz.com.au
www.realestate.com.au
www.domain.com.au
www.realcommercial.com.au
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